Issue one of a policy paper “A Case for the Living Wage” was published on February 22, 2021, and sent to Federal and State elected officials with data indicating, state CPI and minimum wages, data tables and graphs derived from MIT¹ Research, business comments, and other economic and mental health data. This data indicates the logic for using a Geographic County Living Wage, that display the interplay between the existing minimum wage, the proposed nationwide $15/Hr. wage, the MIT Living Wage, and various government poverty levels for five sample states.
The MIT¹ data is a researched geographic cost demand approach, i.e., What is “the minimum subsistence wage for persons living in [a county in] the United States.,” versus the theoretical supply-side application of a nationwide Federal Minimum Wage, which does not reflect actual local family cost of living.
Upon review of the various wage scenarios and the effects on various counties (poorest and richest county by various states), key findings from the data are listed below.
Key Findings:
- $15/Hr. a noble improvement, is not enough. Existing State Minimum wages, and the proposed $15/hr., although an improvement, are not adequate to cover the cost of living for most family compositions, necessitating the need for additional income and/or Government Benefits.
- Two Working Adults Needed. Only if both adults are working full-time all year is their combined minimum wage salary of $30/Hr. approaching the family’s cost of living expenses in the average US county.
- Use a geographical area with Local Synergies and Economic Dependencies (County or State). As the cost of living can vary widely by state and counties, and these local economies are well established, a locally targeted wage at the County level, would mitigate disruption to the locally historically linked employer, employee, and consumer relationships. A phased in approach over several years could mitigate disruptions in these geographies and provide time for business, consumers, and employees to adjust.
- Adjustment of Government Benefit Levels. Implementation of the geographic Living Wage or a new Federal minimum Wage could necessitate the adjusting of poverty rates for certain family compositions, and other benefit guidelines ex. SNAP, EIC, to ensure families on the new wages will not unintentionally have benefits negatively affected, a fall thru the cracks issue.
- Co-ordinate Government programs: If employees become unemployed while business management and consumers are adjusting to the new wages, provisions for training programs or higher education possibly combined with voluntary partially reimbursed relocation assistance could mitigate the layoff, strengthen the employee’s lifetime job position prospects, minimize their reliance on future government programs, and provide business with a more educated work force.